Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold dropped 1.3% to close under $1,645 after upbeat economic reports and hot inflation data undermined speculation that the Fed might pivot away from aggressive rate hikes. The metal ended the week down 0.7%.

The Fed's preferred inflation gauge, the Personal Consumption Expenditures index, rose 0.3% in September, keeping the 12-month inflation rate unchanged at 6.2%. But the core PCE, excluding food and energy costs, rose 0.5% to lift the 12-monthe rate to 5.1% from 4.9% the previous month.

Separately, the US employment cost index rose 1.2% in the third quarter, for annualized increase of 5%. While slightly under the 5.1% increase in Q2, the elevated rate shows that the tight labor market continues to fuel higher wages, which add to the inflationary cycle.

In addition, consumer spending rose 0.6% last month, signaling that the economy remains strong despite sharply higher prices and rapidly climbing interest rates. Consumer spending accounts for around 70% of GDP.

A steady flow of soft data in recent weeks led many analysts to speculate that the Fed would have to throttle back its jumbo rate hikes in coming months to prevent the economy from falling into recession.

Today's reports shifted this dovish narrative somewhat, reminding the markets that inflation has not been tamed and Americans are stilling spending despite the higher prices.

Benchmark 10-year Treasury yields rebounded back over 4% on the hawkish turn in sentiment. While gold is often sought as a hedge against higher inflation, it is pressured by higher Treasury yields because they increase the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tracked higher with yields, rising 0.2% against major rivals. A stronger dollar weighs on gold and other commodities by making them pricier in other currencies, undercutting overseas demand.

The other precious metals were mixed for the day and week. Silver fell 1.8% today but held onto a weekly gain of 0.4%. Platinum dropped 1.9% for the session but rose 1.6% for the week. Palladium lost 2.1% today and 5.4% this week.

At the Comex close: December gold dropped $20.80 to $1,644.60; December silver slid 35 cents to $19.15; January platinum fell $18.30 to $949.10; and December palladium shed $41 to $1,897.20 an ounce.